According to Michael Clark, EPO penalties can heavily impact a company's finances, transferring burdens to loan originators and eroding their commissions, especially amidst rising competition.
Ben Hunsaker explained that if lenders sell loans at a large premium, EPO fees could lead to cash constraints, potentially eradicating profits and incurring extra fees.
EPO fees vary from 1% to 5% of the loan amount and can eliminate profits for lenders, particularly harming smaller companies that might not have advanced systems.
Lenders with mortgage servicing rights (MSR) can better manage recapture from early payouts, unlike those without servicing portfolios, who struggle to identify refinancing clients.
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